FCC Says $7,000 Fine Is Within Reason Despite Financial Hardship

June 14, 2010

WASHINGTON: A small family broadcast business in Alabama
won a fine reduction from the FCC, but still must pay $5,600 for not filing its
license renewal on time and operating without authorization. The case
provides some insight into the FCC’s handling of financial hardship cases.

The station is WFHK-AM in Pell City, Ala.; its president is Adam Stocks. He
argued that the fine would place a significant financial burden on the station
and his family, and that because the station was not a “repeat offender,” the
fine should be reduced. The original notice was issued in early 2007 for
violations dating to several years earlier. Stocks told the FCC that he
and his wife co-owned the station and would have to take out a loan to pay the
fine. He said that in six years of ownership, the station’s only profitable
year had been 2006, when it made $2,600. He submitted three years of profit and
loss statements, showing losses for 2004 and 2005 and a profit in 2006. The
commission nonetheless determined that its original $7,000 fine was
appropriate.

“The $7,000 forfeiture in this case represents 3.9 percent of the station's
average gross revenue over the three years for which information was provided,”
the FCC responded. “In considering claims of financial hardship, we have found
reasonable forfeiture amounts of 4 percent of gross revenue, and the
Enforcement Bureau has found that a forfeiture as high as 7.9 percent of the
violator’s gross revenue was not excessive despite claims of financial
hardship. A forfeiture of $7,000 is therefore reasonable in this case.”

The commission took WFHK’s “an unblemished record of compliance” into account,
however, and trimmed the fine to $5,600. -- from
Radio World